April 12, 2013

Vermont has introduced legislation intended to make renewable energy projects easier to finance.

Representative Peter Welch's Master Limited Partnership Parity Act would allow renewable energy companies to take advantage of master limited partnerships (MLP) -- a key financing tool used by the energy sector, which has driven investments in oil, gas, and coal projects for nearly 30 years.

An MLP is taxed as a partnership, but ownership interests are traded like corporate stock. Profit from publicly traded C corporations is taxed at both the corporate and shareholder levels, but because it is treated as a partnership for tax purposes, income from MLPs is taxed only at the shareholder level.

Currently, there are no laws under which renewable energy projects can take advantage of MLPs, but the bill will change that by expanding the definition of qualified projects.

"Expanding MLP financing to renewable energy projects will be a boost for the renewable industry and for a cleaner energy future. If oil, gas, and coal projects can take advantage of this important tool, there is no reason why renewable projects should be excluded," Welch said in a statement.